What drives our holiday splurges

As December settles in, something curious happens to our wallets. Rationality softens, restraint loosens, and spending accelerates as though it carries emotional weight. The holidays sold to us as a season of warmth and joy also become a psychological pressure cooker. Behind every gift lies a mix of emotion, social signaling, and cognitive shortcuts that quietly shape the way we spend.

Emotional Spending

The holidays activate an emotional landscape that does not feel quite like the rest of the year. Nostalgia, guilt, affection, and even unresolved family dynamics all make their way into our financial behavior. We spend to communicate love. To recreate childhood warmth. To protect traditions. To compensate for a difficult year. The problem is how easily emotions override boundaries. The purchase becomes a symbol. The symbol becomes a duty. And the duty becomes a bill we feel only once January arrives.

No season enforces social comparison, quite like December. Families, workplaces, and social media intensify the unspoken pressure to curate a flawless holiday: the polished home, the meticulously wrapped gifts, the festive outings.  People overspend because the season constructs a standard, one that feels compulsory, even when budgets are already strained.

When the Brain Works Against Us

To understand why holiday spending spirals so quickly, psychologist Raghida Melki explains that several cognitive biases converge in December, quietly shaping our decisions without us realizing it. “There is the scarcity bias,” Melki says.  “With holiday marketing, from ‘limited edition’ to ‘ends tonight’ to ‘only three left’, people experience a sense of omission or FOMO. When that happens, it triggers a fear of missing out, and impulse buying becomes almost automatic.”

She adds that emotional reasoning also plays a major role. “People believe that spending more creates better memories or proves love and care. Their feelings override logical budgeting; they genuinely think a gift must be expensive to be meaningful, even when that’s not true.” Another subtle force is the halo effect. “Many people equate Christmas with joy, family bonding, warmth, and generosity,” Melki explains. “That emotional glow spills into their spending decisions, making them overlook the financial consequences.”

Finally, present bias pushes people toward instant gratification. “We favor the immediate pleasure of giving, celebrating, and indulging over the long-term reality of debt or January stress,” she says. According to Melki, these biases do not operate alone, they stack. “Combined, they create a powerful psychological pull toward overspending. Becoming aware of them is the first step to making more intentional choices during the holiday season.”

Becoming a More Conscious Spender

Mindful spending during the holidays is about reclaiming intention in a season engineered to overwhelm it. Set a ceiling for what you can spend and give every purchase a purpose. Make lists before you shop so stores and algorithms do not decide for you. Pause before buying anything expensive long enough for the emotional rush to pass. And most importantly, anchor the season not in consumption, but in connection, people remember presence far longer than presents.

Understanding why we overspend does not eliminate the urge, but it gives us the space to navigate it. When we recognize how emotions, expectations, and cognitive shortcuts shape our December habits, we regain control of them. And in doing so, we return to something the holidays often disguise but rarely deliver: a sense of peace.